Unassociated Document


    Exhibit
4.2

    


    


     

    Form
of Underwriters’ Warrant

     

    ZIOPHARM
ONCOLOGY, INC.

     

    WARRANT
TO PURCHASE COMMON STOCK

     

    
      	 
      	 
      	 
      
	
              Warrant
      No. 2009PS1-[    ]

            	
                

            	
              Original
      Issue Date:
      [                     ],
      2009

            


    

     

    ZIOPHARM
Oncology, Inc., a Delaware corporation (the “Company”), hereby certifies
that, for value received,
[            ] or
its permitted registered assigns (the “Holder”), is entitled to
purchase from the Company up to a total of
[            ]
shares of common stock, $0.001 par value (the “Common Stock”), of the
Company (each such share, a “Warrant Share” and all such
shares, the “Warrant
Shares”) at an exercise price per share equal to
$[                ]
(as adjusted from time to time as provided in Section 8 herein, the “Exercise Price”), at any time
and from time to time from on or after the date six (6) months after the date
hereof (the “Trigger
Date”) and through and including 5:30 P.M., New York City time, on
[                 ],
2014 (the “Expiration
Date”), and subject to the following terms and conditions:

    


    This Warrant (this “Warrant”) is being issued
pursuant to that certain Underwriting Agreement, dated as of
[                                            ],
2009, by and between the Company and the Representative of the several
underwriters identified therein (the “Purchase Agreement”) and
pursuant to the Company’s Registration Statement on Form S-3 (SEC File No.
333-161453) (the “Registration
Statement”).

     

    1.           
Registration of
Warrants.  The Company shall register this Warrant, upon
records to be maintained by the Company for that purpose (the “Warrant Register”), in the
name of the record Holder (which shall include the initial Holder or, as the
case may be, any registered assignee to which this Warrant is permissibly
assigned hereunder) from time to time.  The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary.

     

    2.           Registration of
Transfers. Subject to compliance with applicable securities laws, the
Company shall register the transfer of all or any portion of this Warrant in the
Warrant Register, upon surrender of this Warrant, with the Form of Assignment
attached as Schedule 2 hereto duly completed and signed, to the Company’s
transfer agent or to the Company at its address specified in the Purchase
Agreement. Upon any such registration or transfer, a new warrant to purchase
Common Stock in substantially the form of this Warrant (any such new warrant, a
“New Warrant”)
evidencing the portion of this Warrant so transferred shall be issued to the
transferee, and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a Holder
of a Warrant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.           Exercise and Duration of
Warrants.

     

    (a)           Subject
to compliance with applicable securities laws, all or any part of this Warrant
shall be exercisable by the registered Holder at any time and from time to time
on or after the Trigger Date and through and including 5:30 P.M. New York City
time on the Expiration Date. At 5:30 P.M., New York City time, on the Expiration
Date, the portion of this Warrant not exercised prior thereto shall be and
become void and of no value and this Warrant shall be terminated and no longer
outstanding.

    


    (b)           The
Holder may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached as Schedule 1 hereto (the “Exercise Notice”),
appropriately completed and duly signed, and (ii) payment of the Exercise Price
in immediately available funds for the number of Warrant Shares as to which this
Warrant is being exercised (or by cashless exercise, if permitted), and the date
such items are delivered to the Company (as determined in accordance with the
notice provisions hereof) is an “Exercise Date.” The Holder
shall not be required to deliver the original Warrant in order to effect an
exercise hereunder.  Execution and delivery of the Exercise Notice
shall have the same effect as cancellation of the original Warrant and issuance
of a New Warrant evidencing the right to purchase the remaining number of
Warrant Shares.

    


    4.           Delivery of Warrant
Shares.

    


    (a)           Upon
exercise of this Warrant, the Company shall promptly (but in no event later than
three Trading Days after the Exercise Date) issue or cause to be issued the
Warrant Shares issuable upon such exercise, and the Company cause such Warrant
Shares to be delivered by the Company’s transfer agent to the Holder by
crediting the account of the Holder’s prime broker with the Depository Trust
Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company
is then a participant in such system, or otherwise by physical delivery to the
address specified by the Holder in the Notice of Exercise.  This
Warrant shall be deemed to have been exercised on the first date on which all of
the foregoing have been delivered to the Company. The Holder, or any “Person” (which for purposes
of this Warrant shall include any individual, limited liability company,
partnership, joint venture, corporation, trust, unincorporated organization or
any other entity, government, including any agency or department thereof)
permissibly so designated by the Holder to receive Warrant Shares, shall be
deemed to have become the holder of record of such Warrant Shares as of the
Exercise Date.  If this Warrant shall have been exercised in part, the
Company shall, at the request of a Holder and upon surrender of this Warrant, at
the time of delivery of the certificate or certificates representing Warrant
Shares, deliver to Holder a new Warrant evidencing the rights of Holder to
purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant. To the
extent permitted by applicable law, the Company’s obligations to issue and
deliver Warrant Shares upon exercise of this Warrant and in accordance with the
terms hereof are unconditional, and the Holder shall, subject to the following
proviso, have the right to pursue any remedies available to it hereunder, at law
or in equity with respect to the Company’s failure to do so; provided, however, that
notwithstanding anything to the contrary in this Warrant or in the Purchase
Agreement, and except as provided pursuant to Section 4(b), if the Company is
for any reason unable to deliver Warrant Shares upon exercise of this Warrant as
required pursuant to the terms hereof, the Company shall have no obligation to
pay to the Holder cash or other consideration or otherwise “net cash settle”
this Warrant.

    


    (b)           
If (1) a certificate representing the Warrant Shares is not delivered to the
Holder within three (3) Trading Days of the due exercise of this Warrant by the
Holder and (2) prior to the time such certificate is received by the Holder, the
Holder, or any third party on behalf of the Holder or for the Holder’s account,
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in satisfaction of a sale by the Holder of shares represented by such
certificate (a “Buy-In”), then the Company
shall pay in cash to the Holder (for costs incurred either directly by such
Holder or on behalf of a third party) the amount by which the total purchase
price paid for Common Stock as a result of the Buy-In (including brokerage
commissions, if any) exceeds the proceeds received by such Holder as a result of
the sale to which such Buy-In relates.  The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in respect
of the Buy-In and, upon request of the Company, evidence of the amount of such
loss.

      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5.           Charges, Taxes and
Expenses. Issuance and delivery of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the Holder
for any issue or transfer tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificates, all of which taxes and
expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder or an affiliate thereof. The
Holder shall be responsible for all other tax liability that may arise as a
result of holding or transferring this Warrant or receiving Warrant Shares upon
exercise hereof.

     

    6.           Replacement of
Warrant.  If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction (in such case)
and, in each case, a customary and reasonable indemnity (which shall not include
a surety bond), if requested. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of a mutilation of this
Warrant, then the Holder shall deliver such mutilated Warrant to the Company as
a condition precedent to the Company’s obligation to issue the New
Warrant.

     

    7.           Reservation of Warrant
Shares. The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares which are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase rights of
persons other than the Holder (taking into account the adjustments and
restrictions of Section 8). The Company covenants that all Warrant Shares so
issuable and deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable. The Company will take all
such action as may be necessary to assure that such shares of Common Stock may
be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of any securities exchange or automated
quotation system upon which the Common Shares may be listed.

     

    8.           Certain Adjustments.
The Exercise Price and number of Warrant Shares issuable upon exercise of this
Warrant are subject to adjustment from time to time as set forth in this Section
8.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (a)           
Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding,
(i) pays a stock dividend on its Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock, (ii)
subdivides its outstanding shares of Common Stock into a larger number of
shares, or (iii) combines its outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction, the numerator of which shall be the number of shares of Common
Stock outstanding immediately before such event and the denominator of which
shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.

     

    (b)           Fundamental
Transactions. If, at any time while this Warrant is
outstanding  (i) the Company effects any merger or consolidation of
the Company with or into another Person, in which the shareholders of the
Company as of immediately prior to the transaction own less than a majority of
the outstanding stock of the surviving entity, (ii) the Company effects any sale
of all or substantially all of its assets in one or a series of related
transactions, (iii) any tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which all or substantially all of
the holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property and would result in the shareholders of the
Company immediately prior to such tender offer or exchange offer owning less
than a majority of the outstanding stock after such tender offer or exchange
offer, (iv) the Company effects any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property (other than
as a result of a subdivision or combination of shares of Common Stock covered by
Section 8(a) above), (v) any transaction where the Company consummates a stock
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than the 50% of the
outstanding Common Stock or (vi) any transaction where any "person" or "group"
(as these terms are used for purposes of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) is or shall become the "beneficial
owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of 50% aggregate ordinary voting power
represented by issued and outstanding Common Stock (in any such case, a “Fundamental Transaction”),
then the Holder shall have the right thereafter to receive, upon exercise of
this Warrant, the same amount and kind of securities, cash or property as it
would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Warrant Shares then issuable upon exercise in full
of this Warrant without regard to any limitations on exercise contained herein
(the “Alternate
Consideration”).  Notwithstanding
the foregoing, in the event of a Fundamental Transaction, at the request of the
Holder delivered before the 90th day after such Fundamental Transaction, the
Company (or the surviving entity) shall
purchase this Warrant from the Holder by paying to the Holder, within five
Business Days after such request (or, if later, on the effective date of the
Fundamental Transaction), cash in an amount equal to the Black Scholes Value of the remaining unexercised
portion of this Warrant on the date of such Fundamental Transaction. The Company shall not
effect any such Fundamental Transaction unless prior to or simultaneously with
the consummation thereof, any successor to the Company, surviving entity or the
corporation purchasing or otherwise acquiring such assets or other appropriate
corporation or entity shall assume the obligation to deliver to the Holder, such
Alternate Consideration as, in accordance with the foregoing provisions, the
Holder may be entitled to purchase and/or receive (as the case may be), and the
other obligations under this Warrant.  The provisions of this
paragraph (b) shall similarly apply to subsequent transactions analogous to a
Fundamental Transaction.  As used
herein, “Black Scholes Value” means the value
of this Warrant based on the Black and Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg Financial Markets determined as
of the day of the closing of the applicable
Fundamental Transaction for pricing purposes and reflecting (i) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the
remaining term of this Warrant as of such date of request, (ii) an expected
volatility equal to the greater of 100% and the 100 day volatility
obtained from the HVT function on Bloomberg Financial Markets as of the day
immediately following the public announcement of the applicable Fundamental
Transaction, (iii) the underlying price per share used in such
calculation shall be the sum of the price per share being offered in cash, if
any, plus the value of any non cash consideration, if any, being offered in the
Fundamental Transaction and (iv) a 365 day annualization
factor.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)           Certain Issuances of Common
Securities. If, any time prior to the four year anniversary of the
Original Issue Date of this Warrant, the Company shall (x) sell or issue shares
of its Common Stock (other than a dividend or distribution of Common Stock
referred to in Section (a) above), (y) issue rights, options or warrants to
subscribe for or purchase shares of Common Stock or (z) issue or sell other
rights for shares of Common Stock or securities convertible or exchangeable into
shares of Common Stock (collectively, any such stock, rights, options or
warrants being referred to as “Common Securities”), at a
price per share less than the then applicable Exercise Price, then in each such
case the Exercise Price in effect immediately prior to the issuance of such
Common Securities shall be reduced to the price determined by multiplying the
Exercise Price in effect immediately prior to the date of issuance of the Common
Securities by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to the issuance of the Common
Securities plus the number of shares of Common Stock which the aggregate
consideration received for the issuance of the Common Securities would purchase
at such Exercise Price, and the denominator of which shall be the number of
shares of Common Stock outstanding immediately after the issuance of the Common
Securities (after giving effect to the full exercise, conversion or exchange, as
applicable, of such Common Securities).  The adjustment provided for
in this Section (ii) shall be made successively whenever any such Common
Securities are issued (provided, however, that,
except as provided below, no further adjustments in the Exercise Price shall be
made upon the subsequent exercise, conversion or exchange, as applicable of such
Common Securities pursuant to the terms of such Common Securities) and shall
become effective immediately after such issuance; provided, however, that the
Exercise Price shall in no event be adjusted pursuant to this paragraph (c) to
amount less than $0.50 per share (which $0.50 amount shall be adjusted
appropriately based on any adjustments pursuant to paragraph (a) of this
Section).  In determining whether any Common Securities entitle the
holders of the Common Stock to subscribe for or purchase shares of Common Stock
at less than the Exercise Price, and in determining the aggregate offering price
of the shares of Common Stock so offered, there shall be taken into account any
consideration received by the Company for such Common Securities, any
consideration required to be paid upon the exercise, conversion, or exchange, as
applicable, of such Common Securities and the fair market value (as determined
in good faith by the Company’s board of directors) of all such consideration (if
other than cash).  Upon the expiration or termination of the right to
exercise, convert or exchange any Common Securities, any adjustment to the
Exercise Price which was made upon the issuance of such Common Securities, and
any subsequent adjustments based thereon, shall be recomputed to reflect the
issuance of only the number of shares of Common Stock actually issued upon the
exercise, conversion or exchange of such Common Securities and the actual
consideration received therefor (as determined herein).  For purposes
of this Section 8(c), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company or by
any subsidiary of the Company. Notwithstanding the foregoing, no adjustment will
be made under this Section 8(c) in respect of: (i) the issuance of securities
upon the exercise or conversion of any Common Stock, or stock or securities
directly or indirectly convertible into or exercisable or exchangeable for
Common Stock (“Convertible
Securities”), issued by the Company prior to the date hereof; provided, however, that
neither the conversion price, exercise price nor number of shares issuable under
such Convertible Securities (excluding any Convertible Securities covered by
clause (ii) below) is amended, modified or changed after the Original Issuance
Date of this Warrant other than pursuant to the provisions of such Convertible
Securities as they exist as of such date, (ii) the grant of options, warrants,
Common Stock or other Convertible Securities (but not including any amendments
to such instruments) to employees, officers, directors of the Company under any
duly authorized Company stock option, restricted stock plan or stock purchase
plan whether now existing or hereafter approved by the Company and its
stockholders in the future, and the issuance of Common Stock in respect thereof,
or (iii) the issuance of securities in a transaction described in paragraphs (a)
and (b) of this Section (collectively, “Excluded
Issuances”).

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)           Rights Upon
Distribution of Assets. If the Company, at any time while this
Warrant is outstanding, shall declare or make any dividend or other distribution
of its assets (or rights to acquire its assets) to holders of shares of Common
Stock, by way of return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, evidence of indebtedness,
property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (excluding those referred to in
Section 8(a)) (a “Distribution”), then in each such case the Company
shall simultaneously distribute such Distribution pro rata to the Holders of
Warrants on the record date or date of effectiveness, as the case may be,
fixed for determining the
holders of Common Stock entitled to participate in such Distribution, in an
amount equal to the amount that each Holder would have been entitled to receive
had its Warrants been exercised in full (without regard to any limitations
on the exercise of the
Warrants) for Warrant
Shares immediately prior to the time for determination of the holders of Common
Stock entitled to participate in such distribution.

     

    (e)           Number of Warrant
Shares. Simultaneously with any adjustment to the Exercise Price pursuant
to paragraph (a) or (c) of this Section, the number of Warrant Shares that may
be purchased upon exercise of this Warrant shall be increased or decreased
proportionately, so that after such adjustment the aggregate Exercise Price
payable hereunder for the increased or decreased number of Warrant Shares shall
be the same as the aggregate Exercise Price in effect immediately prior to such
adjustment.

                                                                

    (f)           Calculations. All
calculations under this Section 8 shall be made to the nearest cent or the
nearest 1/100th of a
share, as applicable. The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account of the
Company, and the sale or issuance of any such shares shall be considered an
issue or sale of Common Stock.

     

    (g)           Notice of
Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 8, the Company at its expense will, at the written request of the
Holder, compute such adjustment, in good faith, in accordance with the terms of
this Warrant and prepare a certificate setting forth such adjustment, including
a statement of the adjusted Exercise Price and adjusted number or type of
Warrant Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in detail the facts upon which such adjustment is based. Upon written
request, the Company will deliver a copy of each such certificate to the Holder
and to the Company’s transfer agent.

     

    9.           Payment of Exercise
Price. The Holder shall pay the Exercise Price in immediately available
funds, or the Holder may, in its sole discretion, satisfy its obligation to pay
the Exercise Price through a “cashless exercise”, in which event the Company
shall issue to the Holder the number of Warrant Shares determined as
follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    X = Y
[(A-B)/A]

     

    where:

     

    X = the
number of Warrant Shares to be issued to the Holder.

     

    Y = the
total number of Warrant Shares with respect to which this Warrant is being
exercised.

     

    A = the
average of the Closing Sale Prices of the shares of Common Stock (as reported by
Bloomberg Financial Markets) for the five Trading Days ending on the date
immediately preceding the Exercise Date.

     

    B = the
Exercise Price then in effect for the applicable Warrant Shares at the time of
such exercise.

     

    For
purposes of this Warrant, “Closing Sale Price” means,
for any security as of any date, the last trade price for such security on the
principal securities exchange or trading market for such security, as reported
by Bloomberg Financial Markets, or, if such exchange or trading market begins to
operate on an extended hours basis and does not designate the last trade price,
then the last trade price of such security prior to 4:00:00 p.m., New York Time,
as reported by Bloomberg Financial Markets, or if the foregoing do not apply,
the last trade price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg Financial
Markets, or, if no last trade price is reported for such security by Bloomberg
Financial Markets, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the "pink
sheets" by Pink Sheets LLC.  If the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Closing Sale Price of such security on such date shall be the fair market
value as mutually determined by the Company and the Holder.  If the
Company and the Holder are unable to agree upon the fair market value of such
security, then the Company shall, within two business days submit via facsimile
(a) the disputed determination of the Warrant Exercise Price to an independent,
reputable investment bank selected by the Company and approved by the Holder or
(b) the disputed arithmetic calculation of the Warrant Shares to the Company's
independent, outside accountant.  The Company shall cause at its
expense the investment bank or the accountant, as the case may be, to perform
the determinations or calculations and notify the Company and the Holder of the
results no later than ten business days from the time it receives the disputed
determinations or calculations.  Such investment bank's or
accountant's determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error.  All such determinations
to be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during the applicable calculation
period

    


    For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued pursuant to the Purchase Agreement
(provided that the Commission continues to take the position that such treatment
is proper at the time of such exercise).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10.           Limitations on
Exercise. Notwithstanding anything to the contrary contained herein, the
Holder shall not have the right to exercise this Warrant to the extent that,
following such exercise, the total number of shares of Common Stock then
beneficially owned by the Holder and its affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with the Holder’s for
purposes of Section 13(d) of the Exchange Act, would exceed 9.99% (the “Maximum Percentage”) of the
total number of issued and outstanding shares of Common Stock (including for
such purpose the shares of Common Stock issuable upon such exercise). For such
purposes, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated
thereunder.  The Company’s obligation to issue shares of Common Stock
in excess of the limitation referred to in this Section shall be suspended (and,
except as provided below, shall not terminate or expire notwithstanding any
contrary provisions hereof) until such time, if any, as such shares of Common
Stock may be issued in compliance with such limitation; provided, that, if, as
of 5:30 p.m., New York City time, on the Expiration Date, the Company has not
received written notice that the shares of Common Stock may be issued in
compliance with such limitation, the Company’s obligation to issue such shares
shall terminate.  By written notice to the Company, the Holder may
from time to time increase or decrease the Maximum Percentage to any other
percentage not in excess of 19.99% specified in such notice; provided that (i)
any such increase will not be effective until the sixty-first (61st) day
after such notice is delivered to the Company and (ii) any such increase will
only apply to the Holder and not to any other holder of Warrants.

    


    11.           Purchase
Rights.  In addition to any adjustments pursuant to Section 8
above, if at any time the Company grants, issues or sells any options,
convertible securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of shares of Common
Stock (the “Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of
shares of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.

     

    12.           No Fractional Shares.
No fractional Warrant Shares will be issued in connection with any exercise of
this Warrant.  In lieu of any fractional shares which would otherwise
be issuable, subject to Section 10, the number of Warrant Shares to be issued
shall be rounded up to the next whole number.

     

    13.           Notices. Any and all
notices or other communications or deliveries hereunder (including, without
limitation, any Exercise Notice) shall be in writing and shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
the Purchase Agreement prior to 5:30 p.m. (New York City time) on a Trading Day,
(ii) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
the Purchase Agreement on a day that is not a Trading Day or later than 5:30
p.m. (New York City time) on any Trading Day, (iii) the Trading Day following
the date of mailing, if sent by nationally recognized overnight courier service
specifying next business day delivery, or (iv) upon actual receipt by the party
to whom such notice is required to be given, if by hand delivery. The address
and facsimile number of a party for such notices or communications shall be as
set forth in the Purchase Agreement unless changed by such party by two Trading
Days’ prior notice to the other party in accordance with this Section
13.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    14.           Warrant Agent. The
Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’
notice to the Holder, the Company may appoint a new warrant agent. Any
corporation into which the Company or any new warrant agent may be merged or any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder’s last address as shown on
the Warrant Register.

     

    15.           Miscellaneous.

     

    (a)   The
Holder, solely in such Person's capacity as a holder of this Warrant, shall not
be entitled to vote or receive dividends or be deemed the holder of share
capital of the Company for any purpose, nor shall anything contained in this
Warrant be construed to confer upon the Holder, solely in such Person's capacity
as the Holder of this Warrant, any of the rights of a stockholder of the Company
or any right to vote, give or withhold consent to any corporate action (whether
any reorganization, issue of stock, reclassification of stock, consolidation,
merger, amalgamation, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance to
the Holder of the Warrant Shares which such Person is then entitled to receive
upon the due exercise of this Warrant. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase
any securities (upon exercise of this Warrant or otherwise) or as a stockholder
of the Company, whether such liabilities are asserted by the Company or by
creditors of the Company. Notwithstanding this Section 15(a), the Company shall
provide the Holder with copies of the same notices and other information given
to the shareholders of the Company, contemporaneously with the giving thereof to
the shareholders.

     

    (b)   Subject
to compliance with applicable securities laws, this Warrant may be assigned by
the Holder. This Warrant may not be assigned by the Company except to a
successor in the event of a Fundamental Transaction. This Warrant shall be
binding on and inure to the benefit of the parties hereto and their respective
successors and assigns. Subject to the preceding sentence, nothing in this
Warrant shall be construed to give to any Person other than the Company and the
Holder any legal or equitable right, remedy or cause of action under this
Warrant. This Warrant may be amended only in writing signed by the Company and
the Holder, or their successors and assigns.

     

    (c)   GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY
TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO
THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY
WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT
SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY
SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR
CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY
AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT
SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL
RIGHTS TO A TRIAL BY JURY. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)           The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.

     

    (e)           In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby, and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.

     

    (f)           Except
as otherwise set forth herein, prior to exercise of this Warrant, the Holder
hereof shall not, by reason of by being a Holder, be entitled to any rights of a
stockholder with respect to the Warrant Shares.

     

    
      16.           Registration Rights; Lock-Up
Restriction.

       

      (a)           The
Holder is not entitled to any registration rights, except for the right of the
Underwriters to require the Company to include this Warrant, the exercise of
this Warrant and the Warrant Shares in the Prospectus (as defined in the
Underwriting Agreement).

      


      (b)           In
accordance with Rule 5110(g) of the FINRA Rules, this Warrant and the Warrant
Shares shall not be sold during the Offering (as defined in the Underwriting
Agreement), or sold, transferred, assigned, pledged, or hypothecated, or be the
subject of any hedging, short sale, derivative, put, or call transaction that
would result in the effective economic disposition of the securities by any
person for a period of 180 days immediately following the Original Issue Date of
this Warrant.

    

     

     

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,

    SIGNATURE
PAGE FOLLOWS]

     

    


    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.

     

    
      
        
          
            	 
      	 
      	 
      
	
                    ZIOPHARM
      ONCOLOGY, INC

                  
	 
      	 
      
	
                    By:

                  	 
      	   
      
	
                    Name:

                  	 
      	 
      
	
                    Title:

                  	 
      	 
      


          

        

      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
1

    


    FORM OF
EXERCISE NOTICE

    


    (To be
executed by the Holder to exercise the right to purchase shares

    of Common
Stock under the foregoing Warrant)

     

     

    To:           ZIOPHARM
Oncology, Inc.

    


    (1)           The
undersigned is the Holder of Warrant No. __________ (the “Warrant”) issued by
ZIOPHARM Oncology, Inc. a Delaware corporation (the
“Company”).  Capitalized terms used herein and not otherwise defined
herein have the respective meanings set forth in the Warrant.

    


    (2)           The
undersigned hereby exercises its right to purchase __________ Warrant Shares
pursuant to the Warrant.

      

    (3)           The
Holder intends that payment of the Exercise Price shall be made as (check
one):

    


                Cash
Exercise

    


                “Cashless
Exercise” under Section 9

    


    (4)           If
the Holder has elected a Cash Exercise, the Holder shall pay the sum of $_______
in immediately available funds to the Company in accordance with the terms of
the Warrant.

    


    (5)           Pursuant
to this Exercise Notice, the Company shall deliver to the Holder _____________
Warrant Shares in accordance with the terms of the Warrant.

     

    (6)           By
its delivery of this Exercise Notice, the undersigned represents and warrants to
the Company that in giving effect to the exercise evidenced hereby, the Holder
will not beneficially own in excess of the Maximum Percentage of shares of
Common Stock (as determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934) permitted to be owned under Section 10 of this Warrant to
which this notice relates.

    


     

     

    Dated:_______________,
_____

     

    

       

      
        
          
            
              
                
                  	
                          Name
      of Holder:

                        	  
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      


                

              

            

          

        

      

      


      
        
          
            
              
                
                  	
                          By:

                        	
                            

                        	 
      
	
                          Name:

                        	
                            

                        	 
      
	
                          Title:

                        	
                            

                        	 
      
	
                          (Signature
      must conform in all respects to name of

                          Holder
      as specified on the face of the Warrant)

                        	 
      


                

              

            

          

        

      

       

       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE
2

    


    ZIOPHARM
ONCOLOGY, INC.

    


    FORM OF
ASSIGNMENT

     

    [To be
completed and signed only upon transfer of Warrant]

     

    FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto the
transferee identified below (the “Transferee”) the right represented by the
within Warrant to purchase                         
shares of Common Stock of ZIOPHARM Oncology, Inc. (the “Company”) to which the
within Warrant relates and appoints                                                 
attorney to transfer said right on the books of the Company with full power of
substitution in the premises.

    


     

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      	 
      	 
      
	
                                Dated:_______________,
_____

                              	 
      	   
      
	 
      	 
      	
                                (Signature
      must conform in all respects to name of holder as specified on the face of
      the Warrant)

                              
	 	 	 
	 	 	 
	 
      	 
      	   
      
	 
      	 
      	
                                Exact
      Name of Transferee

                              
	 	 	 
	 
      	 
      	  
      
	 
      	 
      	
                                Address
      of Transferee

                              
	 
      	 
      	   
      
	 
      	 
      	
                                
                                

                              
	 
      	 
      	 
      


                      

                    

                  

                

              

            

          

        

      

    

     

    
      	
              In
      the presence of:

            
	_____________________________________